Blue-chip stocks declined on lingering worries that corporate profits will lag because of high energy costs and a weaker euro, the faltering single European currency. But energy stocks, led by Exxon Mobil, rose as oil prices bolted to their highest level since the 1990-91 Persian Gulf crisis.

''You are going to see earnings come in a little bit softer than expected for the multinationals,'' said Larry Rice, chief investment officer at Josephthal Lyon & Ross. ''You are going to see the cost of energy, labor, benefits -- all that -- cutting into the bottom line.''

The technology-heavy Nasdaq composite index declined 78.63 points, or 2 percent, to 3,835.23. The slide cut across most sectors, including computer hardware and software, Internet and telecommunications companies.

New economic data, which showed that inflation remained in check, failed to spark financial markets. The widely watched Consumer Price Index, the nation's broadest measure of inflation, slipped 0.1 percent in August, falling well short of expectations for a 0.2 percent rise, after July's 0.2 percent increase.

''That's an old number, it doesn't mean that much anymore because oil prices have changed so much since those numbers were calculated,'' said Ed Peters, chief investment strategist at the Boston-based PanAgora Asset Management.

''We know that the C.P.I. number does not reflect what is going on now,'' he added, referring to the Consumer Price Index. ''All that decline in inflation has been eroded by oil prices' going up.''

The markets were also whipsawed by ''triple witching'' -- the expiration of stock options, index options and futures -- which exaggerated movements in the stock indexes.

Oracle, the database software maker, posted profits late Thursday that beat estimates and set a 2-for-1 stock split. But its shares fell $6.63, to $78.31, on lower-than-expected sales of its application software. The company expects sales of its software that stores and manages reams of information to increase just 20 percent each quarter for the rest of the year, a slower pace than the 32 percent jump in the last quarter.

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''These stocks in particular are all based on very robust sales and they are not priced for any kind of slowdown,'' said Mr. Peters of PanAgora, referring to technology issues.

''Everybody is finally realizing that a slowdown is a slowdown and earnings growth is not going to be at the same rate of the last couple of years,'' Mr. Peters said.

Intel, the chip maker that is Nasdaq's most actively traded share, fell $2.11, to $57.52. Cisco Systems, the Internet infrastructure giant, fell $1.50, to $62.75, and Microsoft, the software giant, was off $1.63, to $64.19.

But Adobe Systems, the maker of Web publishing software, was a bright spot, after posting earnings that beat expectations. Adobe gained $7.25, to $132.625.

Among the Dow components, Exxon Mobil was up $3.79 at $89.06 after hitting a record high of $89.875 earlier in the session, as oil prices surged nearly $2 a barrel, to a decade high of $36.

The 10-year Treasury note fell 12/32, to a price of 99 12/32. The note's yield, which moves in the opposite direction from the price, rose to 5.83 percent from 5.78 percent on Thursday.

The price of the 30-year Treasury bond fell 16/32, to 104 30/32. The bond's yield rose to 5.90 percent from 5.81 percent on Thursday.

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A version of this article appears in print on September 16, 2000, on Page C00003 of the National edition with the headline: THE MARKETS: STOCKS & BONDS; Stocks Tumble as Oil Prices Rise and Oracle Disappoints. Order Reprints|Today's Paper|Subscribe